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Popularity of distributed resources will transform US electric grid

A likely transformation

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The continued surge in distributed resources, such as rooftop photovoltaic and electric vehicles, will likely result in a major shift in the US’s electric grid, according to Intelligent Utility:

From rapid solar market growth in California to innovative smart grid pilot projects in the Pacific Northwest, myriad signs are pointing to the fact that distributed resources—rooftop photovoltaic (PV), electric vehicles, demand response and even storage—are not only here to stay but are increasingly likely to catalyze a transformation in grid operations, planning, and design; customer engagement; and information flow.

Last year, the number of net-metered solar PV projects installed in the U.S. was 46 percent higher than 2011, and solar broadly accounted for nearly half of new generation capacity in the first quarter of 2013. Much of this growth can be attributed to the advent of solar financing models that, for example, allow customers to put solar on their roof for zero dollars down and instant bill savings—projects built through solar leasing arrangements grew from 10 percent in 2009–10 to 70–90 percent of new installs in 2012 in states such as Arizona, Colorado and California.

But the distributed resource story is not just about solar. Consider battery energy storage, once widely believed to be too expensive with little likelihood of change, which is rapidly becoming a viable option for customers. SMA—the world’s biggest supplier of inverters—will begin offering residential battery systems later this year, SolarCity plans to launch a combined PV and storage product in 2015, and NRG Residential Solar has similarly hinted at a solar-plus-battery option coming soon.

Such indicators are not hiccups. Declining technology costs, new business models and increasing grid intelligence are making distributed resources ever more financially attractive. Concerns about climate change, grid resilience and local economic development are further driving the transition. This transition is so significant for the grid because of distributed resources’ unique characteristics compared to the centralized resources around which the grid was designed.

• Siting: Smaller, more modular energy resources can be installed by disparate actors outside of the purview of centrally coordinated resource planning.

• Operations: Energy resources on the distribution network operate outside of centrally controlled dispatching mechanisms that manage the real-time balance of generation and demand. To the extent that they are powered by variable sources such as solar and wind, their output fluctuates.

• Ownership: Distributed resources can be financed, installed, and owned by the customer or a third party.


Distributed resources are thus increasingly changing how the grid functions and is managed. Three implications especially stand out.

1.) Visibility and transparency


2.) Integrated planning


3.) A more granular grid



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